Analyzing the Impact of Changing Tastes and Expectations on Demand

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Questions and Answers

Define a shift in the supply curve.

A shift in the supply curve is called a change in supply.

Define a movement along a fixed supply curve.

A movement along a fixed supply curve is called a change in quantity supplied.

Define a shift in the demand curve.

A shift in the demand curve is called a change in demand.

Define a movement along a fixed demand curve.

A movement along a fixed demand curve is called a change in quantity demanded. Signup and view all the answers

What does equilibrium refer to?

Equilibrium refers to a situation in which the price has reached the level where quantity supplied equals quantity demanded. Signup and view all the answers

What is the equilibrium price?

The equilibrium price is the price that balances quantity supplied and quantity demanded. On a graph, it is the price at which the supply and demand curves intersect. Signup and view all the answers

What is the equilibrium quantity?

The equilibrium quantity is the quantity supplied and the quantity demanded at the equilibrium price. On a graph, it is the quantity at which the supply and demand curves intersect. Signup and view all the answers

Why does the price fall when there is a surplus?

The price falls when there is a surplus because there is an excess supply of goods or services, leading producers to lower their prices in order to sell more. Signup and view all the answers

Why does the price rise when there is a shortage?

The price rises when there is a shortage because there is an excess demand for goods or services, leading producers to raise their prices in order to maximize profits. Signup and view all the answers